TaxTMI 
TaxTMI 
TaxTMI 
2021 (8) TMI 466
X X X X Extracts X X X X
X X X X Extracts X X X X
....to association Rs. 7,62,500/- The assessee has also pointed out a computation error made by the A.O. in ground No.6 of the grounds of appeal. 3. The assessee is engaged in the business of manufacture and sale of gold, silver and platinum jewellery and other precious metal and stones. 4. The first issue relates to disallowance of repair expenses treating the same as capital in nature. The A.O. noticed that the assessee has claimed Rs. 29.70 lakhs as repair expenses. The A.O. treated the same as capital in nature and accordingly disallowed the claim after allowing depreciation of 10% thereon. Accordingly, he disallowed a sum of Rs. 26,73,520/-. The Ld. CIT(A) partially allowed the claim and confirmed disallowance to the extent of Rs. 21,30....
X X X X Extracts X X X X
X X X X Extracts X X X X
....epairing the flooring, renovating the distributors and customers display area and waste mitigation and production process systems. The nature of expenses incurred by the assessee has been narrated by the A.O. as under:- a) Flooring Expenses: The building is about 15 years old and the flooring was laid out of mosaic tiles The wear and tear during the said years was obstructing the movement of men and material and affected our production. During the F.Y.2011-12 we have laid vitrified tiles for the entire production, administration and managerial area comprising of about 20,000 Sq.ft. The total expenditure incurred in this regard during the F Y 2011-12 amounts to Rs_2,83.478/- b) Renovation of distributors and customers display area; The ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ook. Reception chamber, Security premises for the upkeep of the premises and in tune with recent expectation of the marketing and distribution agents. The total expenditure incurred in this regard during the F Y 2011-12 amounts to Rs. 2,62,684/- Admittedly, these expenses have been incurred on the building taken on lease. Though these expenses can be considered as renovation expenses, yet we notice that it has not resulted in creation of any capital asset attracting Explanation 1 to section 32 of the Act. The Hon'ble High Court of Madras has considered an identical issue in the case of Anush Shares & Securities Pvt. Ltd. (supra) and it has been held as under: "11. Next issue relates to deduction claimed for the expenditure incurred towa....
X X X X Extracts X X X X
X X X X Extracts X X X X
....they were separate entities. The co-owners were admitting the rental income. They were also paying tax on the profits arising out of the hospital. The lease deed spoke of the normal requirements which the coowners provided. The assessee was putting the building to a special use. No landlord would ever incur or under-take to bear the expenditure. The expenditure was incurred by the assessee on a leased property and had to he allowed as revenue expenditure. (ii) ThiruArooran Sugars Ltd. (supra). Held : that the temporary structure by means of false ceiling and office renovation had not resulted in any capital expenditure. From the above decisions and the facts before us we do not have any hesitation to hold that the aforesaid expense....
X X X X Extracts X X X X
X X X X Extracts X X X X
....R. submitted that the assessee has become member of All India Gems & Jewellery Trade Association and it has participated in a programme called "Perfect Manufacturer of India, 2011-13" (PMI) organised by the above said Federation. The assessee has paid a sum of Rs. 11.63 lakhs for participating in the above said programme. In addition to that, the assessee has also paid a sum of Rs. 15.25 lakhs to the federation as corpus donation. The Ld. A.R. submitted that since the All India Gems & Jewellery Trade Federation is working for the interest of the business carried on by the assessee, there is business expediency in giving above said donation, i.e., it is for promoting business interest of the assessee. Accordingly, he submitted that the entir....
X X X X Extracts X X X X
X X X X Extracts X X X X
....f the paper book. All the receipts clearly show that the payment have been received by All India Gems & Jewellery Trade Federation towards donation. The assessee has furnished a copy of application form for participating in the PMI programme in pages 34 & 35 of the paper book. With regard to the amount of Rs. 15 lakhs, the assessee has stated as under:- "I further wish to make a corpus donation of Rs. 15 lakhs to CGF recognising the value in its bringing to trade and education and well being of the community." The above said statement would show that the payment of Rs. 15.25 lakhs was voluntary and not under compulsion. Even otherwise, as rightly pointed out by Ld. D.R., there is no material to show that the donation was made under comp....